Why Restaurants Have Rules Against Really Big Tips

By Kate Taylor | Small Business

The luckiest day in Saina Brown's life quickly turned sour when the Waffle House waitress received a $1,000 tip from a mysterious business man, only to have the windfall snatched away due to corporate policy.

Waffle House's policy is to refund unusually large tips made by credit card and then contact the guest to ask for the sum in either cash or check. While Brown was able to get a hold of the mega-tipper, the incident brought up questions about why she couldn't have just kept the money in the first place.

Turns out, Waffle House is asking itself the same thing. "In light of the recent situation in North Carolina, this has given us cause to review our procedures so we can get tips to our associates quicker in these unusual situations," says a spokesperson. "A situation like this is rare; however we have had few incidences of this nature in the past."

The concern for Waffle House and other restaurants wary about big tips is that the credit-card charge may be disputed at a later date. There's concern that waiters may be committing fraud by penning the tips themselves. There is also a worry that customers might regret their impulsive or intoxicated decision to leave a large tip, and claim that it's fraud.

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Most restaurants seem ready to accept their good luck when large tips come their way. Tips for Jesus, a movement of anonymous do-gooders who leave large tips and record them over social media, has left amounts ranging from hundreds to thousands of dollars. They have successfully left tips everywhere from local restaurants and bars to chain restaurants including IHOP and Denny's.

The Waffle House incident isn't the first time a well-meaning tipper has run into trouble. Last year, when a trio left $10,000 in tips one day at a Notre Dame-run sports bar, it took months for the employees to receive any money. Apparently, the university was concerned the tip, linked to Tips for Jesus, was a fraud.

Still, they have it better than another unlucky Tips for Jesus recipient. A Californian waiter didn't cash a tip worth several thousand dollars because he assumed the benefactor had simply made a mistake after having too much to drink.

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